JOHANNESBURG: As the COVID-19 pandemic upended the global diamond industry, shuttering mines from Lesotho to Canada and disrupting supply chains, Rajen Patel swapped diamond polishing for peanut farming.
The lone bright spot has been steady demand for large, high-quality diamonds from affluent investors, according to financiers and sales data. "What has happened in the second quarter, I have never seen in my life," De Beers Chief Executive Bruce Cleaver told Reuters."There was no really properly functioning rough market."
Australia's Lucapa Diamond inked a deal with an unnamed"high-end diamantaire" to sell some of its high-value diamonds from the Mothae mine in Lesotho for US$505 per carat plus a 50per cent share of the margin on the future polished diamond sale. In the meantime, miners are hoping production cuts will help prices recover. With Rio Tinto's massive Argyle diamond mine in Australia among those coming offstream soon, global diamond production will likely be reined in until 2025, independent analyst Paul Zimnisky forecasts.
Even De Beers is feeling the pain, saying job cuts are likely, as it remains unclear whether supply will shrink enough to meet plunging demand in the global diamond jewellery market, which Bain estimated was worth US$80 billion in 2019.